sc13da601874122_03302008.htm

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ptz8o+/VE0fkn9xwJX+c3dHiYW6jxFe3dG2g8s2oMkL28lLQXbmv4SyejlLbVjNy Ik2zxT6O1ejJmoaKyvvXLA== 0000921895-08-001002.txt : 20080401 0000921895-08-001002.hdr.sgml : 20080401 20080331211237 ACCESSION NUMBER: 0000921895-08-001002 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080401 DATE AS OF CHANGE: 20080331 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ROWAN COMPANIES INC CENTRAL INDEX KEY: 0000085408 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 750759420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-30728 FILM NUMBER: 08727106 BUSINESS ADDRESS: STREET 1: 2800 POST OAK BLVD. STREET 2: SUITE 5450 CITY: HOUSTON STATE: TX ZIP: 77056-6127 BUSINESS PHONE: 7136217800 MAIL ADDRESS: STREET 1: 2800 POST OAK BOULEVARD STREET 2: SUITE 5450 CITY: HOUSTON STATE: TX ZIP: 77056-6127 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO INC DATE OF NAME CHANGE: 19711110 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO DATE OF NAME CHANGE: 19671112 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STEEL PARTNERS II LP CENTRAL INDEX KEY: 0000915653 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 590 MADISON AVENUE STREET 2: 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-758-3232 MAIL ADDRESS: STREET 1: 590 MADISON AVENUE, 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: STEEL PARTNERS II L P DATE OF NAME CHANGE: 19950627 SC 13D/A 1 sc13da601874122_03302008.htm sc13da601874122_03302008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 6)1

Rowan Companies, Inc.

(Name of Issuer)

Common Stock, par value $0.125

(Title of Class of Securities)

779382100

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

March 30, 2008

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS II, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 10,518,234
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 10,518,234
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,518,234
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS II GP LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 10,518,234
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 10,518,234
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,518,234
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS II MASTER FUND L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 10,518,234
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 10,518,234
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,518,234
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 10,518,234
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 10,518,234
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,518,234
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON WARREN G. LICHTENSTEIN
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 10,518,234
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 10,518,234
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,518,234
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON JOHN J. QUICKE
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON ROBERT H. KANNER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 779382100

The following constitutes Amendment No. 6 to the Schedule 13D filed by the undersigned (“Amendment No. 6”). This Amendment No. 6 amends the Schedule 13D as specifically set forth.

Item 2.

Identity and Background.

Item 2 is hereby amended to add the following:

In connection with the Settlement Agreement described and defined in Item 4, Steel Partners II is no longer seeking the election of Warren G. Lichtenstein, John J. Quicke and Robert H. Kanner as directors of the Issuer at its 2008 annual meeting of shareholders (the “2008 Annual Meeting”). As a result, Messrs. Quicke and Kanner terminated their obligations to act in concert with the other Reporting Persons with respect to the Issuer effective March 30, 2008. Accordingly, Messrs. Quicke and Kanner are no longer members of the Section 13(d) group and will cease to be Reporting Persons immediately after the filing of this statement. The remaining Reporting Persons will continue filing as a group statements on Schedule 13D with respect to their beneficial ownership of securities of the Issuer, to the extent required by applicable law.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The aggregate purchase price of the 10,518,234 Shares owned by Steel Partners II is approximately $397,272,761, including brokerage commissions. The Shares owned by Steel Partners II were acquired with partnership funds.

Steel Partners II effects purchases of securities primarily through margin accounts maintained for it with prime brokers, which may extend margin credit to it as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On March 30, 2008, Steel Partners II entered into a settlement agreement with the Issuer (the “Settlement Agreement”) pursuant to which Steel Partners II withdrew its nomination of Warren G. Lichtenstein, John J. Quicke and Robert H. Kanner for election as directors at the 2008 Annual Meeting of Stockholders of the Issuer. Steel Partners II also agreed that it will not engage in any solicitation of proxies with respect to the election of directors or any other matter to be voted on at the 2008 Annual Meeting of Stockholders or at any special meeting of the Issuer’s stockholders held in lieu thereof.

Pursuant to the Settlement Agreement, the Issuer agreed to commit to pursue appropriate means to monetize its investment in its wholly-owned subsidiary, LeTourneau Technologies, Inc. (“LTI”), on or before December 31, 2008 (the “Monetization”). Such Monetization is to be achieved by any one of the following: (i) LTI becoming a separately traded public company, (ii) all or substantially all of LTI’s assets being sold, (iii) a majority of LTI’s outstanding capital stock being sold, (iv) a merger of LTI with another entity in exchange for equity and/or cash or (v) a similar transaction resulting in the Issuer independently receiving cash and/or stock proceeds in exchange for its interest in LTI. If the Monetization is not consummated on or before December 31, 2008, then, effective January 1, 2009, the Issuer agreed to increase the size of its Board of Directors by one director and fill such vacancy with a person to be designated by Steel Partners II (the "Steel Designee"). The Steel Designee shall either be Warren Lichtenstein or, if it is not Mr. Lichtenstein, the Steel Designee must be approved in advance by the Issuer’s Board of Directors, with such approval not to be unreasonably withheld. The Steel Designee shall serve in the class of directors next standing for election at the Issuer’s 2011 Annual Meeting of Stockholders.

CUSIP NO. 779382100

The Issuer further agreed that if the Monetization is accomplished through an initial public offering or private sale of all or a portion of LTI’s capital stock (a “Qualified Monetization”), the Issuer will repurchase at least $400 million of its outstanding Shares. Any such repurchases of Shares shall be made pursuant to either or both of the following means: (i) an open market share repurchase program, or (ii) an equity self-tender offer, in either case on terms to be determined by the Issuer. The Issuer shall have 30 calendar days following the consummation of the Qualified Monetization to commence such open market repurchases (which shall be consummated within 60 days after commencement) and/or commence the equity self-tender offer, subject to certain exceptions.

The Issuer agreed to reimburse Steel Partners II for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel Partners II’s intended solicitation of proxies from the Issuer’s stockholders at the 2008 Annual Meeting of Stockholders and the negotiation of the Settlement Agreement, in an aggregate amount not to exceed $100,000.

The foregoing description of the Settlement Agreement is not complete and is qualified in its entirety by reference to its full text. A copy of the Settlement Agreement is filed as exhibit 99.1 hereto and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 111,312,724 Shares outstanding, which is the total number of Shares outstanding as of February 26, 2008 as reported in the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 filed with the Securities and Exchange Commission on February 29, 2008.

As of the close of business on March 28, 2008, Steel Partners II beneficially owned 10,518,234 Shares, constituting approximately 9.4% of the Shares outstanding. By virtue of their relationships with Steel Partners II discussed in further detail in Item 2, each of Steel GP LLC, Steel Master, Partners LLC and Warren G. Lichtenstein may be deemed to beneficially own the Shares owned by Steel Partners II.

Item 5(c) is hereby amended to add the following:

(c) Schedule A annexed hereto lists all transactions in securities of the Issuer by the Reporting Persons during the past sixty days. All of such transactions were effected in the open market.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On March 30, 2008, Steel Partners II entered into the Settlement Agreement as discussed in further detail in Item 4.

CUSIP NO. 779382100

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1

Settlement Agreement between Rowan Companies, Inc. and Steel Partners II, L.P., dated March 30, 2008

CUSIP NO. 779382100

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: March 31, 2008	STEEL PARTNERS II, L.P.

	By:	Steel Partners II GP LLC General Partner

	By:	/s/ Lauren Isenman
		Lauren Isenman as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

	STEEL PARTNERS II GP LLC

	By:	/s/ Lauren Isenman
		Lauren Isenman as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

	STEEL PARTNERS II MASTER FUND L.P.

	By:		Steel Partners II GP LLC General Partner

	By:	/s/ Lauren Isenman
		Lauren Isenman as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

	STEEL PARTNERS LLC

	By:	/s/ Lauren Isenman
		Lauren Isenman as Attorney-In-Fact for Warren G. Lichtenstein, Manager

	/s/ Lauren Isenman
	LAUREN ISENMAN as Attorney-In-Fact for Warren G. Lichtenstein

	/s/ John J. Quicke
	JOHN J. QUICKE

	/s/ Robert H. Kanner
	ROBERT H. KANNER

CUSIP NO. 779382100

SCHEDULE A

Transactions in Securities of the Issuer During the Past Sixty Days

Class of

Security

Securities

Purchased / (Sold)

Price ($)

Date of

Purchase / Sale

STEEL PARTNERS II, L.P.

Common Stock	100,000	33.7660	01/30/08
Common Stock	26,721	33.8906	02/01/08
Common Stock	100,000	34.9876	02/04/08
Common Stock	93,000	33.2443	02/07/08
Short Put Option ($37.50 Strike Price)	(200)	--	02/20/08
Short Put Option ($37.50 Strike Price)	(500)	--	02/22/08
Covered Short Put Position ($37.50 Strike Price)	700	0.2493	03/05/08

STEEL PARTNERS II GP LLC

None

STEEL PARTNERS II MASTER FUND L.P.

None

STEEL PARTNERS LLC

None

WARREN G. LICHTENSTEIN

None

JOHN J. QUICKE

None

ROBERT H. KANNER

None

EX-99.1 2 ex991to13da601874122_033008.htm SETTLEMENT AGREEMENT ex991to13da601874122_033008.htm

Exhibit 99.1

[ROWAN COMPANIES LETTERHEAD]

March 30, 2008

Steel Partners II, L.P.

590 Madison Avenue

32nd Floor

New York, NY 10022

Gentlemen:

Steel Partners II, L.P. ("Steel") and Rowan Companies, Inc. (the "Company") have been engaging in preliminary good faith discussions concerning the Company's intention to monetize the value of the Company's wholly-owned subsidiary, LeTourneau Technologies, Inc. ("LTI"). Both Steel and the Company believe it is in their best interests that they not engage in an election contest in connection with the election of directors at the Company's 2008 annual meeting of stockholders or at any special meeting of the Company's stockholders held in lieu thereof (collectively, the "2008 Stockholders' Meeting").

Therefore, Steel and the Company agree as follows:

1. Steel, by its signature below, irrevocably withdraws its Notice of Intention to Nominate Individuals for Election as Directors at the 2008 Annual Meeting of Stockholders of Rowan Companies, Inc., dated January 8, 2008, and Steel agrees that neither it nor any of its affiliates will seek to nominate any candidates to stand for election to the Company's Board of Directors at the 2008 Stockholders' Meeting.

2. Steel hereby agrees that it will not engage in any solicitation of proxies with respect to the election of directors or any other matter to be voted on at the 2008 Stockholders' Meeting. The Company hereby acknowledges that the only matters to be voted on at the 2008 Stockholders' Meeting are the election of directors and the ratification of the appointment of auditors.

3. The Company hereby commits to pursue appropriate means to monetize its investment in LTI (which shall be achieved by entering into a transaction resulting in any one of the following: (i) LTI becoming a separately traded public company, (ii) all or substantially all of LTI's assets being sold, (iii) a majority of LTI’s outstanding capital stock being sold, (iv) a merger of LTI with another entity in exchange for equity and/or cash, or (v) a similar transaction resulting in the Company independently receiving cash and/or stock proceeds in exchange for its interest in LTI) on or before December 31, 2008 and, if it fails to so consummate a monetization of its investment in LTI on or before December 31, 2008, then, effective January 1, 2009, the Company will increase the size of its Board of Directors by one director and fill such vacancy with a person to be designated by Steel (such designee, together with any successor to such designee appointed as a director in accordance with the terms hereof, referred to herein as the "Steel Designee"). The Steel Designee shall either be Warren Lichtenstein or, if it is not Mr. Lichtenstein, the Steel Designee must be approved in advance by the Company's Board of Directors, with such approval not to be unreasonably withheld. The Steel Designee referred to in this paragraph shall serve in the class of directors next standing for election at the Company's 2011 annual meeting of stockholders (the "2011 Stockholders' Meeting"). In the event a Steel Designee ceases for any reason to serve as a director of the Company prior to the 2011 Stockholders' Meeting, Steel will have the right to designate a person to fill such vacancy (the "Successor Designee") to hold office for the unexpired term of the Steel Designee. Any Successor Designee must be approved in advance by the Company's Board of Directors, with such approval not to be unreasonably withheld, and appointed as a director to fill the vacancy promptly following such approval.

4. (a) If monetization of LTI is accomplished through an initial public offering of all or a portion of the shares of capital stock of LTI or through a private sale of all or a portion of the shares of capital stock of LTI (a “Qualified Monetization”), the Company hereby agrees to repurchase at least $400 million of its outstanding shares of Common Stock in accordance with paragraph 4(b).

(b) Any repurchases of shares of common stock required pursuant to this paragraph 4 shall be made pursuant to either or both of the following means: (i) an open market share repurchase program, or (ii) an equity self-tender offer, in either case on terms to be determined by the Company. The Company shall have 30 calendar days following the consummation of the Qualified Monetization to commence such open market repurchases (which shall be consummated within 60 days after commencement) and/or commence the equity self-tender offer; provided, however, that the Company shall be entitled to postpone any such commencement if (x) the Company is in possession of material nonpublic information concerning it or its business and affairs the disclosure of which would not otherwise be required at such time and the Board of Directors of the Company determines in good faith that the prompt public disclosure of such information would have a material adverse effect on the Company, provided that such postponement pursuant to this clause (x) shall not exceed 60 days, or (y) such commencement would otherwise occur during a quarterly blackout period, in which case such commencement shall occur within three business days following such quarterly blackout period.

5. The Company agrees to reimburse Steel for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel's intended solicitation of proxies from the Company's stockholders at the 2008 Stockholders' Meeting and the negotiation of this letter agreement, in an aggregate amount not to exceed $100,000. The Company agrees to pay such expenses to Steel within five business days of its receipt from Steel of supporting documentation for such expenses.

6. The Company and Steel each acknowledge and agree that money damages would not be a sufficient remedy for any breach (or threatened breach) of this letter agreement by it and that, in the event of any breach or threatened breach hereof, the non-breaching party shall be entitled to seek injunctive and other equitable relief, without proof of actual damages, that the breaching party shall not plead in defense thereto that there would be an adequate remedy at law, and that the breaching party agrees to waive any applicable right or requirement that a bond be posted by the non-breaching party. Such remedies shall not be the exclusive remedies for a breach of this letter agreement, but will be in addition to all other remedies available at law or in equity.

7. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the principles of the conflicts of laws thereof. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of Delaware and irrevocably and unconditionally waive any objection to the laying of venue of any action, suit, or proceeding arising out of this letter agreement in the courts of the State of Delaware or the United States of America located in Delaware, and further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum. This letter agreement shall inure to the benefit of the parties hereto and their respective successors and assigns.

[Continued on next page]

8. This letter agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same agreement. One or more counterparts of this letter agreement may be delivered by telecopier or PDF electronic transmission, with the intention that they shall have the same effect as an original counterpart hereof.

Very truly yours,

ROWAN COMPANIES, INC.


By:	/s/ John L. Buvens, Jr.
	Name:	John L. Buvens, Jr.
	Title:	Executive Vice President, Legal

Confirmed and Agreed to:

STEEL PARTNERS II, L.P.

By:	Steel Partners II GP LLC
	General Partner

By:		/s/ Warren G. Lichtenstein
		Name:	Warren G. Lichtenstein
		Title:	Managing Member

Dated: March 30, 2008

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